If you're an American wireless provider founded in 1978, here's your horoscope for today: avoid US regulatory agencies, customers whom you've charged for text messages without asking, and burly-looking men with open burlap sacks and insistent expressions. The Wall Street Journal reports that the Federal Communications Commission intends to fine Sprint $105 million in punishment for sending unwanted text messages to its customers, then sticking them with the bill.

The report says that the FCC is focusing on a three-month window in the fall of last year, during which the Commission received over 35,000 complaints from Sprint customers. The unwanted text messages included the usual carrier "alerts," ringtones, sports information, and even horoscopes, which the FCC says Sprint knowingly and willfully sent to customers with the intent to "cram" them with extra charges. At least a portion of the fine, calculated based on the volume and cost of the charges, would be reserved for affected Sprint customers to claim.

The investigation enlisted the help of the US Consumer Financial Protection Bureau and various state Attorneys General, and the Wall Street Journal source claims that at least three of five FCC commissioners will vote in favor of the fine. It would tie a fine forced on AT&T for overbilling earlier this year as the largest in the Commission's history. For context, Sprint recorded a net income of $8.5 billion for the third quarter of this year, with an operating loss of $192 million - if the full fine was imposed it wouldn't be a crushing blow, but it wouldn't be a slap on the wrist, either.

Comments

the government sure is hungry for other peoples money....over $100 million for unwanted text messages? Do you think thats how much the charges ended up being?? or do you think thats a fraction of the cost and the government is going to pocket the rest, and in turn basically bankrupt a company? I would not be surprised if this causes Sprint to puts the "For Sale" sign up out front and actively starts searching for a suitor to buy.

Daniel Marcus

A significant portion of that money ends up going to claims. If the rest goes to the FCC, I'm fine with that. For once they're actually helping consumers like they're supposed to. Anyway, it's not going to crush Sprint. They can absorb the cost. Their shareholders won't be happy, but Sprint has bigger problems right now than the FCC.

I agree with half of that....you are right, Sprint could absorb it. I know the FCC is "helping", however, how does that signify such a large fine for something no...minuscule? the FCC has been known to only pursue courses when it sees they can make a large amount of profit from fining companies.

knightsbore

FCC hardly ever fines at near the amount a company makes from bad behavior. I would be willing to bet that Sprint made more money from the spam than it is being fined for. As such, fines are punishment and for a multi-billion dollar company if they are not fined a significant amount then the fine is meaningless.

The FCC does not get the money. The money goes to the customers and to the US Treasury. The FCC does not give a crap about the Treasury's income, considering 1) totally separate departments 2) the federal government's annual budget is $3.9 trillion.

I did not believe this until I google'd it! I did not realize it goes back in to the general budget. Learn something new every day! :)

Daniel Marcus

Miniscule? Maybe to one person, but add it up over months, and Sprint makes a killing on it. These are the business practices that really scare me. When it's just high prices, it's your choice to buy it, but booting your profits by millions of dollars by hitting your customers with nickels and dimes? It's just bad shady. I want Sprint to get a good smack for this, at least in the amount that they earned by doing this to their customers. If we assume that Sprint charged $0.05 per text, and only those 35k people who filed complaints got a single one, that's $1,750 not a lot. Also, not likely. More likely is that one percent of people wrote a complaint, and in general, people probably got over a dozen. That's around 2,100,000 in Sprint's pocket.

I get it now. The more I've read on it, the more shady its becoming on their part. I think it just shocked me that I read $105 million and unwanted text messages in the same article haha. I withdraw my statement!

shadowx360

That's how punitive damages works. Otherwise it's like this: Sprint scams $2 million. Sprint has a 50% chance of getting caught and fined $2 million for it. On average, they come out $1 million ahead. Punitive damages ensure that Sprint will think again before scamming others.

The government isn't trying to bankrupt a company, it's trying to send a message that scamming customers will have consequences and hopefully deter Sprint from doing so again.

yeah the more I read on it, the more I'm getting it and how they are for sure in the wrong. I think the amount of money fined compared to what they were fined for just gave me sticker shock.

Nicholas Polydor

The government absolutely should bankrupt the company and then pass on the money to the affected customers. Behavior like this (I'll use the US spelling, since it's appropriate!) is utterly despicable and the company deserves to fail with the CEO sent to prison.

T’

Wait, what? They sent you spam SMS and charged you for that?
Oh, and btw, I have yet to see another country where you get charged for receiving SMS.

pat

Canada

Munim

Yup, learned from their big brother how to screw people

ins0mn1a

every time you receive any kind of instant internet message (hangouts, skype, whatsapp, viber, whatever) you use data that you pay for, i.e. you are paying to receive messages. i understand that's not what you were referring to, but most people that i know, anywhere in the world, are replacing sms with other kinds of messaging, and paying to receive it.

T’

Yes, they pay like $0.0001 per message. Or even less. Because they decide to pay for an active internet connection.

The thing with SMS is that someone already paid for sending them. So your carrier is double charging you for the same service. Also, many SMS are delivered in the cell tower's keep alive messages, so there's not even additional communication necessary.

Btw, this is also why SMS were a free 'gimmick' in Germany the early days of mobile phones.

ins0mn1a

i think both sms and phone calls being charged as separate services should just go away. they are ridiculously expensive, and are nothing but a money-grab on the part of carriers.

the point i was trying to make is different: the principle where each side that takes part in communication pays for their own side of the bill, even if they didn't initiate the connection, is a good one, i think, because it leaves a lot of space for innovation (hint: google voice, and that's just the beginning). in theory the person who sends that text message only pays for half of it. the fact that the telcos are trying to keeps us all stuck in the 20th century with "phone calls" and "text messages" is a different story.

fd

What? You get charged for incoming SMS. Indian carriers dont even charge for incoming while roaming internationally.

Tom

Oh, and btw,

Jephri

Sprint: /sprint/
Verb.
~run at full speed over a short distance.
I was approached by my brother about joining his framily plan and had to Sprint out of his house to avoid being sick on his carpet.

WestSiide

In that sentence, sprint should not be capitalized.

shonangreg

You anti-capitalist . . .

blindexecutioner

Probably affects people on dumb phones. 4+ years ago I had to call several times to have text charges like this removed. Each one was like .15 or. 20 cents.

You would think in this day and age that the feature to BLOCK Text Messages as spam or unwanted/unsolicited text would exist so that you could dispute paying for texts you didn't want!

WestSiide

Nowadays most carriers give you unlimited texts for free. If your plan only gives you a certain of texts allowed per month, in the event that you go over, you're typically charged somewhere between ¢10-20 cents per text. Yes it is wrong for Sprint to even charge people for those unwanted texts, but the truth is that people are essentially whining over a few cents extra that they had to pay.

Franklin Ramsey

Um, no. People are whining that they had to pay for texts sent to them by the provider, which they didn't want, but then had to pay for. It's like if you were on a plan you pay by text, and then your provider started sending you text messages simply because you have to pay for them. They were creating revenue for themselves in a shady manner.

Mix

Totally, It's like having to pay a fee for junk mail.

jim

Why no prosecutions for theft? Someone in the company authorised the action. Jail time would help stop this kind of action

Matthew Fry

And 0 pressure on enemies of net neutrality.

John Smith

I agree. It wouldn't surprise me if ISP lobbyists (comcast, etc) come out on top.